By Hillel Aron
By Joseph Tsidulko
By Patrick Range McDonald
By David Futch
By Hillel Aron
By Dennis Romero
By Jill Stewart
By Dennis Romero
When the Houston-based energy giant Enron filed for Chapter 11 on December 2 -- ravaging most of its employees, even as its bosses rolled in hundreds of millions -- it seemed that Bush would finally have to pay the piper. Enron was his biggest financial backer (over $2 million), its CEO, Kenneth Lay, is one of his country-club pals (the president calls him “Kenny Boy”), and the current administration is so enmeshed with the company that the relationship is, if not demonstrably criminal, profoundly corrupt.
But so far Bush is getting away with it. Only one journalist has had the guts to ask him about the bankruptcy -- naturally, the president prevaricated -- and nobody had the guts to follow up. Which isn’t to say that Bush‘s dodgy links to Enron have gone unnoticed. Congressional investigations have been called by dreary Joe Lieberman and sharp Henry Waxman; Robert Scheer keeps pounding away at it in the L.A. Times. Still, the story hasn’t yet developed what media types insist on calling traction. Now I would hardly expect The Wall Street Journal to offer an expose of White House evildoing (though I‘d enjoy some public self-flagellation at its failure to grasp that Lay was the Wizard of Oz). But I would hope that papers like The New York Times and the Washington Post would devote as many resources to scrutinizing Bush and Enron as they did to Bill Clinton and Madison Guaranty.
After all, the Enron saga offers all the sprawling comic richness and icy moral clarity of a Tom Wolfe novel. Back in the mid-’80s, it was just a dingy little gas-pipeline company. But capitalizing on the Reagan era‘s vogue of deregulation, Enron reinvented itself, turning into a behemoth that traded in energy rather than merely providing it. By 2000, it had become the poster boy for the benefits of deregulation and limited government oversight. Here was a $60 billion concern that smugly called itself the “World’s Leading Company.” And why not? Although Enron had a low public profile -- have you ever even seen its tilted “E” logo? -- it was idolized by financial publications. And like a tumor, it was growing inexorably bigger, even building pipelines and plants in Argentina, Bolivia, Brazil, India, Mozambique, the Philippines and China. Meanwhile, back in Houston, the corporate hotshots behaved as if the word hubris hadn‘t yet been translated into Texan.
In a superb article in the December 9 Houston Chronicle, reporter Greg Hassell offered a portrait of Enron’s glory days, laying bare a gaudy corporate culture that was busy readying its vanities for the bonfire: Beyond the in-building health club and free Starbucks coffee, silver Porsches became an obligatory parking-lot status symbol, and traders were known to freak out when their annual bonus was only half a million bucks. This conspicuous consumption was encouraged by an evangelical leadership that one former executive compared to the Taliban -- either you were for the company or you were an infidel. To call down an Enron fatwa, you needed merely ask for proof of its extravagant claims of profitability (proof its accountants obviously didn‘t seek very diligently).
As Hassell explains, Enron focused on deals that looked lucrative in the short term -- “My bonus is based on what I do this quarter,” shrieked one of its agonized traders -- even if they were long-term disasters. Such shortsightedness didn’t just sap the company, it led to an abject lack of social responsibility. When Enron wasn‘t driving up energy prices in California last year, it was buying up, then destroying Oregon’s homegrown energy system; in India, human-rights groups have compelling evidence of physical violence against villagers who opposed new plants by Enron subsidiary Dabhol Power Co. This same casual amorality turned office politics into one endless episode of Corporate Survivor, in which a policy nicknamed “rank and yank” had employees give one another annual ratings, with the bottom 15 percent being fired. In such a cutthroat culture, it‘s hardly surprising that Enron execs would sell off their own shares for a fortune and prohibit underlings from doing the same, even when it became obvious that Enron stock was sinking faster than a Soviet sub. Such is the fine art of bankruptcy.
Naturally, many politicians buried their snouts in Enron’s trough, some of them Democrats, but none so deeply as the Bush family and their associates. It started with Papa Bush, whose secretary of state, secretary of commerce and director of operations for the Joint Chiefs of Staff all eventually joined the Enron payroll. And it continued with his son, who received $500,000 from Enron for his first gubernatorial campaign, and with Kenneth Lay‘s blessing, used an Enron company jet when he ran for president. No doubt coincidentally, “Kenny Boy” was named to Bush’s transition team and helped interview candidates for the Federal Energy Regulatory Commission; during the vice president‘s secret hearings on energy policy, Dick Cheney met privately with Lay and other Enron executives, the only company to be granted such a favor. At the moment, Bush’s chief economic adviser, Larry Lindsey, and top trade negotiator, Robert Zoellick, have both served as advisers to Enron, while Secretary of the Army Thomas White Jr. was an Enron exec before joining the administration (evidently he sold his stock in time).